Investor reactions to gender pay information and CEO gender

Friend or Foe? CEO gender, political ideology, and gender-pay disparities in executive compensation

PurposeThis study investigates the relationship between CEO leadership, gender homophily and corporate environmental, social and governance (ESG) performance. We also investigate whether it is essential to have a critical mass of women directors on the board to create a significant power of gender diversity in leadership positions.Design/methodology/approachOur study is based on firms listed on the London Stock Exchange (FTSE-All-Share) from 2011 to 2019. CEO characteristics and other board variables were collected from BoardEx, and ESG data, and other related variables were collected from Eikon database.FindingsWe find a critical mass of female directors contributes to ESG performance suggesting that token representation of female directors on boards limits their effectiveness. We do not find support for the gender homophily perspective, our findings suggest that the effectiveness of female CEOs does not depend on the existence of a critical mass of female directors. Female directors and female CEOs are less likely to be associated with ESG activities when firms experience poor financial performance. We also find that younger female CEOs have a positive impact on ESG performance. Furthermore, we find female CEOs with shorter tenure are more likely to improve ESG performance. Overall, our findings suggest a substitutional effect between having female CEOs and gender diverse boards.Originality/valueThis study contributes to the debate on gender homophily in the boardroom and how that may affect ESG practices. It also complements existing academic research on female leadership and ESG performance and has important implications for senior management and policymakers.

Recent literature finds that firms led by female CEOs are more likely to be targeted by activist shareholders, and that female CEOs are more likely to cooperate with activist shareholders’ requests. Our study complements this literature by investigating how a CEO’s response to shareholder activism influences investors’ reactions, and whether reactions differ depending on the gender of the CEO. Using an experiment, we find that investors evaluate a firm as less attractive when a female CEO uses an uncooperative response rather than a cooperative response to shareholder activism. Alternatively, investors evaluate a firm as less attractive when a male CEO uses a cooperative response rather than an uncooperative response. Our results suggest that investors rely on gender stereotypes when evaluating the responses of male and female executives to shareholder activism, and that these evaluations affect their investment judgments. Our results also suggest a potential alternative explanation for the finding that female CEOs are more likely to cooperate with activist shareholders than male CEOs. Rather than inherent differences in the management style of male and female CEOs, responses may be driven, at least in part, by managers anticipating that they will be penalized by investors for deviating from gender-stereotypical behavior.

Research Summary Several upper echelons studies have found that firms led by female executives are less likely to engage in risky endeavors than those led by male top executives. We argue that conceptualizing female CEOs as universally conservative decision‐makers may paint too simplistic a picture and that the impact of CEO gender on strategic decision‐making may vary significantly depending on the given situation CEOs are experiencing. We integrate executive job demands and gender research to propose that scrutiny will exhibit differential effects on female and male CEOs' acquisition activity. We show that in high‐scrutiny contexts, the difference between male and female CEO acquisition activity disappears. In contrast, in low‐scrutiny contexts, the difference between male and female CEOs' acquisition activity is exaggerated. Managerial Summary Substantial research has shown that female executives acquire at a lower rate than male executives. We argue that viewing female CEOs as universally conservative decision‐makers may paint too simplistic a picture and that the impact of CEO gender on strategic decision‐making may vary significantly depending on the given situation CEOs are experiencing. In particular, we argue and find that in high‐scrutiny contexts, the difference between male and female CEO acquisition activity disappears. This research suggests that managers should consider the impact of environmental context—especially the role of scrutiny—when considering the risk propensity of female leaders.

PurposeThis study aims to investigate the relations between CEO gender, power and bank performance. First, this study examines the relation between CEO gender and power. Do female CEOs possess less power than male CEOs? As women reach the top, do they hold similar or even higher levels of power as men? Second, this study investigates the relation between the CEO gender and bank performance. How do female CEOs perform? Is the relation between gender and performance subject to CEO power?Design/methodology/approachThis study uses the following three performance measures: ROA, pre-tax ROA and pre-provision profit over assets. This study follows Finkelstein’s (1992) classifications and adopt five variables to measure the four dimensions of CEO power: duality and compensation share measure structural power; ownership captures ownership power; number of functional areas measures the power of expertise; and elite education captures prestige power. Logit model, ordinary least squares regression and quantile regression methods are used in the analysis.FindingsIn a sample of Chinese banks, female CEOs are found to have similar power and performance as male CEOs. As women reach the top, they hold higher ownership and greater prestige power than men. Female CEOs even outperform male CEOs in non-state dominated banks. Female CEOs show their impact through their power: those with higher compensation shares or greater power are positively related to bank performance.Originality/valueOverall, the results show that as women reach the top, they hold a higher level of power than men. As females break through the glass ceiling, they perform better than males. Moreover, female CEOs show their impact through their power. Female CEOs who overcome the barriers are less traditional and more self-directed than their peers.

Purpose– The purpose of this study is to examine the impact of gender and ethnicity of CEO and audit committee members (directors) on audit fees and audit delay in the US firms.Design/methodology/approach– Audit-related corporate governance literature has extensively examined the determinants of audit fees and audit delay by focusing on board characteristics, specifically board independence, diligence and expertise. The authors provide empirical evidence that gender and ethnicity diversity in corporate leadership and boardrooms influence a firm’s audit fees and audit delay.Findings– This study finds that firms with female and ethnic minority CEOs pay significantly higher audit fees than those with male Caucasian CEOs. The authors also find that firms with a higher percentage of ethnic minority directors on their audit committee pay significantly higher audit fees. Further, the authors find that firms with female CEOs have shorter audit delay than firms with male CEOs and firms with a higher percentage of female and ethnic minority directors on their audit committee are associated with shorter audit delay. Results indicate that female CEOs and both female and ethnic minority directors are sensitive to the market pressure to avoid audit delay.Research limitations/implications– The results suggest that gender and ethnic diversity could improve audit quality and the firms’ overall financial reporting quality.Practical implications– This study provides insights to regulators and policy-makers interested in increasing diversity within a firm’s board and top executives. Recently, the US Securities and Exchange Commission (SEC) and the European Commission have been pressing publicly traded companies to improve diversity among their directors. This study provides evidence and perspective on how diversity can enhance financial reporting quality measured by audit fees and audit delay.Originality/value– Previous studies have not given much attention on the impact of racial ethnicity in addition to gender characteristics of top executives and audit committee directors on audit fees and audit delay.

We examine the glass cliff proposition that female CEOs receive more scrutiny than male CEOs, by investigating whether CEO gender is related to threats from activist investors in public firms. Activist investors are extraorganizational stakeholders who, when dissatisfied with some aspect of the way the firm is being managed, seek to change the strategy or operations of the firm. Although some have argued that women will be viewed more favorably than men in top leadership positions (so-called "female leadership" advantage logic), we build on role congruity theory to hypothesize that female CEOs are significantly more likely than male CEOs to come under threat from activist investors. Results support our predictions, suggesting that female CEOs may face additional challenges not faced by male CEOs. Practical implications and directions for future research are discussed. (PsycINFO Database Record

We examine the glass cliff proposition that female CEOs receive more scrutiny than male CEOs by investigating whether CEO gender is related to threats from activist investors in public firms. Activist investors are extra-organizational stakeholders who, when dissatisfied with some aspect of the way the firm is being managed, seek to change the strategy or operations of the firm. Although some have argued that women will be viewed more favorably than men in top leadership positions (so-called ‘female leadership’ advantage logic), we build on role congruity theory to hypothesize that female CEOs are significantly more likely than male CEOs to come under threat from activist investors. Results support our predictions, suggesting that female CEOs may face additional challenges not faced by male CEOs. Practical implications and directions for future research are discussed.

Purpose This study aims to investigate the impact of earnings predictability and truthfulness on nonprofessional investors’ investment willingness. Design/methodology/approach Earnings predictability is captured by quarterly earnings autocorrelation, and earnings truthfulness is indicated by real earnings management (REM). The average of investment attractiveness and willingness measures investment willingness. The authors use experiments to isolate the impact of quarterly earnings autocorrelation and REM on investors’ investment behaviors. Findings From the 2 × 2 design, the authors observe that investors weight more on earnings predictability than earnings truthfulness. Research limitations/implications The generalization of the findings may be constrained for the following reasons. First, the authors use only one proxy, REM, to measure earnings truthfulness. In addition, the authors provide the participants, Amazon Mechanical Turk, with earnings predictability. Results may no longer hold if each participant has different understanding and analysis of earnings predictability. Practical implications In periods of unprecedented and severe financial uncertainty (i.e. the COVID-19 pandemic), investors rely more on earnings predictability than on earnings truthfulness. The study assists managers to strategically emphasize the predictability of earnings to attract investors, especially when firms face financial challenges or uncertainty. Social implications This study contributes to understanding investor behavior and the critical role of earnings predictability and truthfulness in shaping investment decisions. Originality/value This paper contributes to the literature of earnings properties in financial reporting, particularly by shedding light on the nuanced interplay between earnings predictability and earnings truthfulness. The research also demonstrates that elevated earnings autocorrelation indirectly stimulates investment willingness by enhancing the investors’ perception of earnings persistence of targeted firms.

Despite the theoretical support for the idea that female leaders are undervalued than their male counterparts, empirical studies on gender gap in executive compensation have yielded mixed results. Knowing this, we suggest an alternative approach to investigate the phenomenon. Using data on the first pay of newly appointed CEOs, we show that new female CEOs tend to receive a significantly lesser amount of first pay than new male CEOs. Also, we find that an increasing proportion of outside directors in corporate boards reduces this tendency both by increasing the first pay of new female CEOs and by decreasing the first pay of new male CEOs. Contrary to our expectation, however, the proportion of female directors has no interaction effects between new CEO gender and the amount of first pay. Implications and future directions are discussed.

PurposeThe paper aims to test the impact of gender‐relevant factors on professional respect for leaders.Design/methodology/approachThree determinants were analysed: gender constellation (gender match) between leaders and followers, gender‐stereotypic leadership behaviour, and followers' gender role attitudes. A field study with N1=121 followers and their N2=81 direct leaders from 34 German organisations was conducted. Leaders were on the lowest level of hierarchy.FindingsThe data showed that female leaders are at risk of receiving less professional respect from their followers than male leaders: male followers of female leaders had less professional respect than female followers of male leaders. Moreover, gender role discrepant female leaders (i.e. autocratic) got less respect than gender role discrepant male leaders (i.e. democratic). But no difference was found with regard to gender role congruent female (i.e. democratic) and male (i.e. autocratic) leaders. Finally, followers with traditional gender role attitudes were prone to have comparatively little professional respect for female leaders.Research limitations/implicationsFuture research should analyse gender‐relevant factors that influence the granting of professional respect and systematically compare these effects across branches. Furthermore, it would be interesting to see whether followers evaluate leaders from higher levels of hierarchy in the same way as our respondents did.Practical implicationsIn order to promote women in leadership positions, followers' prejudices against female leaders should be reduced.Originality/valueField studies about the evaluation of female and male leaders explicitly considering their followers' gender role attitudes are rare. The results reflect that sexism is well and alive.

Innovation is a critical driver of economic growth, yet the role of top executive characteristics—particularly CEO gender—in fostering innovation remains under-explored in developing country contexts. This study examines whether firms led by female CEOs in low- and middle-income countries are more likely to pursue innovative activities. Using firm-level data from the World Bank’s Enterprise Surveys and a logistic regression framework, we analyze the impact of CEO gender on the likelihood of firm innovation (product or process introduction), controlling for research and development (R&D) activity, firm size, ownership structure, and industry sector. The results provide evidence that female-led firms have a significantly higher probability of innovating compared to male-led firms, even after accounting for key covariates. Notably, the marginal effect of having a female CEO is positive, implying that female leadership adds about 5–10 percentage points to the predicted probability of innovation, holding other factors constant. Robustness checks, including goodness-of-fit tests and multicollinearity diagnostics, support the validity of the findings. These findings align with Upper Echelons Theory, suggesting that top executives’ characteristics shape organizational outcomes. The study contributes to the literature on gender diversity and innovation by highlighting how female CEOs can influence firm innovation in emerging economies. It also underscores the importance of supportive institutional frameworks—such as inclusive corporate cultures and pro-diversity policies—in amplifying the innovation benefits of female leadership. Our analysis suggests that empowering more women to reach executive roles could be a catalyst for innovation-led growth in developing economies

Different governments and institutional contexts around the world have increasingly voiced concerns regarding the sustainability practices of businesses, recognizing their critical role in ensuring long-term growth and survival. In this comprehensive study, we examine the underlying dynamics of how CEO gender influences various dimensions of governance – namely Environmental, Social, and Governance (ESG) performance – using data from two major providers: Refinitiv and Bloomberg. The study covers a total sample of 3,617 firm-year observations, encompassing 742 companies and 1,087 CEOs from non-financial sectors of the S&P 1200 index, over the 2017–2022 period. ESG information is sourced from either Refinitiv and/or Bloomberg databases. As a first step, we analyze ESG data from Bloomberg and Refinitiv separately. Our findings reveal a significant relationship between CEO gender and a firm’s ESG performance, with results varying depending on the ESG data provider. Specifically, ESG metrics for the same firms, as reported by different providers, either demonstrate a strong and statistically significant positive association with female leadership or show no meaningful relationship. By highlighting the positive influence of gender diversity in corporate leadership on ESG outcomes, this research underscores the value of promoting female representation in executive roles.

CEO gender and corporate labor cost

This research aims to determine the factors that affect teachers’ trust in male and female leaders. The study employed a qualitative research design. The data were collected with interview technique. In this regard, 20 teachers were interviewed. The participants were determined with purposeful sampling method. The data were analyzed with inductive analysis method. Results revealed that the participant teachers trust different behaviors or characteristics of their male or female leaders. In general, teachers trust in their female leaders’ more because of their objective, idealistic, dedicated behaviors, and also their motherly, sensitive and compassionate personality. On the other hand, teachers trust in their male leaders as they are fair, trustworthy, frank, competence, more rational and strong communicators. While male leaders are believed to take initiative and implement the laws and regulations more strictly, female administrators are more interested in the administration profession, behave meticulously and work devotedly. It is recommended that school administrators should create a climate of objectivity and trust in school.